Venezuela looks set to miss its 2012 oil production target – 3.5 million barrels per day – despite the fact that two new prospects in the Orinoco oil belt will likely begin production later this year.
A statement by Energy Minister Rafael Ramirez on Tuesday indicated that the current average output of 3.13 million bpd is well short of the 3.50 million bpd target set by President Hugo Chavez. Although the OPEC nation has joint ventures coming up – one involving Italy’s Eni (NYSE: E) and one involving a Russian consortium – by the end of 2012, the impact won’t be enough to power them to the target.
Ramirez also said that Venezuela would be investing a massive $18 billion over this year, and $6 billion of that will go toward increasing crude production.
The Orinoco belt’s production was underwhelming, despite anticipations that it would shoulder most of the year’s production. Together, Petrojunin and Petromiranda, two Venezuelan oil groups, are expected to come up with around 80,000 bpd by the end of this year. Back in 2011, Ramirez had declared that Petromiranda alone would be producing around 50,000 bpd by May of this year.
Another joint venture between PDVSA and Vietnam’s Petrovietnam, Petromacareo, stated in April that it had begun production; however, domestic output records do not reflect these additional volumes. There were two other joint ventures including Chevron (NYSE: CVX) and Repsol (PINK: REPYY) that were expected to show production before 2012 began, but they have not begun production yet, and PDVSA has not named a date.
A large proportion of Venezuela’s petroleum income goes toward supporting the nation’s popular social programs, and the country has come under criticism for not exploiting and expanding its oil sector more.